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Arbitrage
     Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. Arbitrage exits between the difference in prices in the cash and futures markets. In finance theory, an arbitrage is a "free lunch"—a transaction or portfolio that makes a profit without risk. Such arbitrage opportunities reflect minor pricing discrepancies between markets.Arbitrage traders will buy and sell the same or closely related securities at the same time. They take advantage of the price or value differences in two separate markets such as the BSE and the NSE. In perfect securities markets there would never be any arbitrage traders or trades. Since the securities markets are not perfect when news or other information moves a security or index they can and often do become unequal in price temporally. If the markets were perfect all identical securities would trade at the same value or price on each market they were traded on.This is a risk free investment which suits investors who have idle funds in bank fixed deposits and would like to replace it by higher yielding returns.

Delta Neutral Trading and Delta Neutral Hedging are especially for option trader who wants completely no directional risk or bias. A trader who wishes to protect himself against the downside losses while keeping profits open for upside gains should use Contract Neutral Hedging. A comprehensive understanding of delta neutral trading and delta neutral hedging is also a pre –requisite skill for all market makers.
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